MINUTES OF THE

      ASSEMBLY COMMITTEE ON TRANSPORTATION

 

      Sixty-seventh Session

      May 19, 1993

 

 

 

The Assembly Committee on Transportation was called to order by Chairman Larry L. Spitler, at 1:15 p.m., on Wednesday, May 19, 1993, in Room 331 of the Legislative Building, Carson City, Nevada.  Exhibit A is the Meeting Agenda.  Exhibit B is the Attendance Roster.

 

 

COMMITTEE MEMBERS PRESENT:

 

      Mr. Larry L. Spitler, Chairman

      Mr. Val Z. Garner, Vice Chairman

      Mr. Bernie Anderson

      Mrs. Vonne Chowning

      Mr. Tom Collins, Jr

      Mr. Lynn Hettrick

      Mr. James W. McGaughey

        Mr. Louis A. Toomin

 

COMMITTEE MEMBERS ABSENT:

 

      William D. Gregory (Excused)

 

GUEST LEGISLATORS PRESENT:

 

      Christina R. Giunchigliani, District No. 9

 

STAFF MEMBERS PRESENT:

 

      Kerry Carroll-Davis, Senior Research Analyst, Legislative             Counsel Bureau

 

OTHERS PRESENT:

 

      Pat Coward, Nellis Cab Company, Desert Taxicab Company

      Keith Schwer

      Larry Bell, Whittlesea Bell

      John Vergiels, Nellis Cab Company

      Mary Santina, Retail Association Nevada

      Bonnie James, Las Vegas Chamber of Commerce

      Harry Vogle, Taxicab Authority

      Sandra Pardo, Taxicab Authority

      Isabelle Pfeiffer, Taxicab Authority

     

 

ASSEMBLY BILL NO 590:   Expands jurisdiction of taxicab authority to                          include certain counties.

 

Chairman Spitler informed the committee A.B. 590 would be placed in a subcommittee; however, opening testimony was welcomed.  Subcommittee members appointed were Chairman Larry Spitler, Mr. Anderson and Mr. Hettrick. 

 

Chairman Spitler stated the Public Service Commission would be involved, in terms of information, with the A.B. 590 hearings.  He declared as an employee with Sprint/Centel Telephone Company of Nevada who had a relationship with the Public Service Commission of Nevada,  serving in the capacity of subcommittee chairman would not impact him negatively or positively in terms of regulation with the telecommunications area; therefore, he would participate as subcommittee chairman on A.B. 590.

 

Christina R. Giunchigliani, District No. 9, stated the proposed bill evolved from testimony heard in the Assembly Ways and Means Committee, on budgets regarding the Taxicab Authority.  She was aware fellow legislators heard many arguments on whether or not certain responsibilities belonged to either counties or states.  She stated a similar discussion emanated from the Ways and Means Committee regarding the Taxicab Authority.  Ms. Giunchigliani reflected a statewide program was created to license taxicabs.  An authority was established to carry out the program; however, the state only utilized the authority in Clark County.  She stated discussion conveyed proper regulation which worked in one area of the state in the south needed to be looked at for expansion to the northern part of the state.  She stated the proposed bill dropped the population cap for the Taxicab Authority's authoritative area from 400,000 to a population of 100,000.  She stated the cap would exclude rural counties but included larger counties in addition to Clark County.  Mrs. Giunchigliani felt the Taxicab Authority did a wonderful job and the bill provided for their regulations to be applied to other large counties for protection to the public as well as taxicab drivers.

 

Mr. Garner asked the amount involved with the fiscal note. Mrs. Giunchigliani informed him there was no note at the time as the bill had just came out. 

 

Chairman Spitler informed the committee the the Taxicab Authority was fee-based and not a general fund agency; therefore, the note would be extensive.  He stated the Taxicab Authority needed an  opportunity to study how the bill would impact its budget.

 

Mr. Garner clarified the bill did not evolve as a request of people in Washoe County.  Ms. Giunchigliani agreed and stated the bill came as a result of the Taxicab Authority's testimony and discussion in Ways and Means. 

 

Mr. Anderson pointed out counties overlapped in a corner of Northern Nevada where taxicabs serviced.  He asked if any consideration was given to place regulative authority with the Public Service Commission.  Ms. Giunchigliani noted the legitimacy of the question but stated she did not feel qualified to answer.  She stated similarities in boundary lines also existed regulatory wise in Clark County such as crossing over from Henderson to North Las Vegas, etc.  She repeated the real issue of the bill pertained to consumer protection.  She added if existing regulations worked well, those regulations should be applied to the entire industry regardless of where that industry was located.

 

Mr. McGaughey acknowledged the presence of Senator Keith Ashworth in the audience and stated Senator Ashworth was very involved with the Taxicab Authority's beginning and felt he might be able to provide historical information. 

 

Chairman asked if anyone else wished to testify or reserve testimony for the subcommittee hearings. 

 

Sandra Pardo, Taxicab Authority, expressed her desire to work with the subcommittee.

 

Richard Hill, Airport Authority of Washoe County, indicated his desire to work with the subcommittee.

 

Senator Ashworth agreed to speak with the subcommittee to provide a history to the subcommittee.  

 

SENATE BILL NO. 100:   Revises manner in which taxicabs are allocated                                                in larger counties. (BDR 58-220)

 

Pat Coward, representing Nellis Cab Company and Desert Cab Company, summarized the purpose of S.B. 100 was to provide a stable, dependable method of taxicab medallion allocations.

 

Mr. Coward introduced Dr. Keith Schwer, former Director of the Center for Business and Economic Research, and a member of economic faculty at the University of Nevada-Las Vegas.  Mr. Coward reported on Mr. Schwer's twenty-five years of experience in business and Mr. Schwer's economic research conducted with major university programs in Maryland, Nevada, Oklahoma, Tennessee, Vermont, and Wyoming. 

 

Mr.  Schwer, with the aid of an overhead projector, presented a slide presentation as testimony (Exhibit C) in support of the bill. Mr. Schwer explained he and other professors assembled a comprehensive study of taxicab usage for the Taxicab Authority in 1990.  He stated the study undertook three key issues which included: customer satisfaction, rates charged, and allocations.   Mr. Schwer explained the graphs presented resulted from over 400 responses to two surveys.

 

Mr. Schwer explained all conclusions were based on the study done for the Taxicab Authority except for the fourth conclusion, as the study did not relate to local resident population. 

 

Mr. Anderson asked if the study gave consideration to point of origin at places other than the airport.  Mr. Schwer elucidated the study was conducted at the airport; however, they did look at responses from people traveling from the airport to lodging and back to the airport including from the "Las Vegas Strip" to downtown.  Mr. Anderson concluded the study would not display whether immediate resident needs were being met or not.  Mr. Schwer concurred and apprised members the study did not address local community issues.  Mr. Anderson felt the preference market statement was a weighted factor as some people preferred rental cars regardless of the taxicab industry.  Mr. Schwer felt the factor was lightly addressed under the study's satisfaction graph. 

 

Chairman Spitler asked what other markets the flat growth rate of taxicabs was compared with.  Mr. Schwer replied a comparison was not done with any other cities.  Chairman Spitler inquired if taxicabs were not regulated at all, would they carve into markets of limousines or rental cars. Mr. Schwer replied a simple economic factor inferred the higher the number of taxicabs, the higher the share of market.  Mr. Spitler assumed the market share between different modes of transportation would increase as he felt reasons people used taxicabs versus rental cars differed greatly as the study did not indicate whether people took varied modes of transportation for the same reasons.  Mr. Schwer explained a dynamic of ground transportation was the changing pattern.

 

Mr. Spitler asked if any people renting cars indicated they would have taken a taxi had they been able to obtain one faster or more conveniently.  Mr. Schwer stated the question was not on the survey.

 

Expounding on profiles of people interviewed for the study, Mr. Schwer explained the study took place at McCarran Airport in Las Vegas at different periods of time with the working team randomly approaching people awaiting departure from the airport.

 

Chairman Spitler asked if the study interviewed businesses which relied on the tourist industry, for example, restaurants.  Mr. Schwer indicated the study did not.   Chairman Spitler asked how S.B. 100 would assure him that his district constituents would have access to a taxicab 90 percent of the time within 15 - 20 minutes.  Mr. Schwer assessed the bill did not relate to his question as the bill looked at the aggregate market with the bulk of taxicab service relating to tourism which largely dealt with the "Strip."  Chairman added Las Vegas had a number of well-known restaurants not located on the strip and it worried him that the study did not provide input on what happened off the resort court. 

 

Mr. Coward explained the purpose of the study showed the taxicab market was flat and with a dynamic growth factor occurring in Las Vegas, the taxicab market, from an allocation point, was not keeping up with the market.  He repeated the study was taken strictly from tourism with no aspect introduced at the local market.  He felt the local market was addressed in A.B. 406 (of the 66th session). Mr. Coward felt the allocation of additional medallions would take care of service to all areas. 

 

Chairman Spitler asked what percentage of people responded they were unable to obtain a cab upon arriving at the airport.  Mr. Schwer did not have that percentage.  Chairman Spitler stated he frequently used the airport and had never had any problems obtaining a cab.  He felt the service to and from the airport was excellent.  Mr. Spitler felt it was important to note respondents to the study made a choice in their transportation modes.

 

Mr. Anderson wondered how many of the study respondents might have been first-time visitors who were unaware of the distance to the "Strip" and felt they needed a rental car.  Mr. Schwer stated the question was addressed.

 

Mr. Coward indicated he would distribute a copy of the study to all committee members as requested by Mr. Anderson.  He indicated the study did address customer satisfaction.

 

Mr. Toomin asked the regulatory process of rental cars. Mr. Schwer replied rental car companies were allowed as many cars as they wanted; however, limousine companies were regulated by the Public Service Commission.  Mr. Coward interjected his understanding limousine regulation was based on market demand.

 

Larry Bell, representing Whittlesea Bell, informed the committee limousine regulation required a certificate of public convenience and necessity in order to operate a limousine service.  He stated once the certificate was obtained, market determined how many vehicles could be operated by the company.  Mr. Toomin asked whether the market was based on dollars or population.  Mr. Bell replied the market was based on dollars.  He said if a company utilized all their limousines and felt it feasible to use a few more,  they would be able to put them on the road. 

 

Mr. Coward distributed and explained the taxicab industry's year-end statistics (Exhibit D).  He stated the statistics indicated the increase in approved medallions by the Taxicab Authority with no real reduction in revenue.  He was aware concern existed that revenue might be affected for drivers and owners if too many more medallions were issued.  Mr. Coward concluded S.B.100 provided a more stable, dependable method of allocating taxicab medallions, but the Taxicab Authority still had the responsibility to make sure the needs and new medallions were allocated where the greatest needs were.  He felt it was a good, important policy issue.

 

Chairman Spitler asked if it was the position of the companies Mr. Coward represented that taxicabs should not be regulated at all in terms of numbers.  John Vergiels, representing Nellis Cab, stated Nellis Cab operated under the framework of current law administered by the Taxicab Authority.  He stated there was no discussion about doing away with the Taxicab Authority or placing the industry in a free market place as that was a policy decision.  Mr. Vergiels explained he had experienced waiting for cabs plenty of times at the airport and the system was not perfect.  He stated the only issue S.B. 100 dealt with was allocation of medallions in light of the population growth. 

 

Mr. Coward indicated an issue of A.B. 406 (of the 66th session) was to give the Taxicab Authority means to review needs of the population including tourism, restaurants, and other geographic areas for allocation of medallions to the greatest area with need.  

 

Chairman Spitler understood everything was in place to do what cab companies needed done; however, something needed to be done so a regulatory factor was not cumbersome.  Mr. Coward agreed and stated his clients were seeking a stable means of allocating and dissolving the gridlock which existed now at hearings where dissention existed between different groups.  He indicated his desire to see energy expended toward customer demand rather than constantly debating allocations.  He stated the bill allowed a mechanism, based on demands, to automatically allocate.  In addition, he stated it also provided ability for the Taxicab Authority to annually review needs and adjustments.   

 

Mr. Collins noticed a discrepancy in the number of registered rental cars and felt DMV might offer more concise information.  He felt  surveys could be more informative concerning consumer's overall selection of transportation modes and the impact hotel courtesy shuttle buses had on the transportation market.  Mr. Coward informed Mr. Collins "Revenues per Shift" represented the amount of revenue received per taxi per shift with the driver receiving between 41-46 percent of that revenue.  He stated 15 percent of the total per shift take-in was recognized by the Internal Revenue Service as tip income.

 

Mr. Coward explained if the bill passed, 34 additional taxicabs would be allocated between the total fleet of 12 companies with each company receiving up to 2-3 cabs.  He felt the difference in goals of cabdrivers and owners was very little as business common sense would not place excess vehicles on streets that did not generate revenue.  Mr. Anderson agreed at some point a profit margin would not exist in the taxicab industry.  He also assessed the cost of operating a cab was higher today than in 1982.  Mr. Coward agreed.

 

Chairman Spitler stated the bill required the Taxicab Authority to issue medallions whether or not cabs generated money. He asked if cab company owners could refrain from placing cabs on the street or decrease the number of cabs they owned if they did not want the extra cabs mandated by the proposed bill.  Mr. Coward indicated if a revenue decrease existed, it seemed likely additions would not be made.  He reiterated taxicabs were market sensitive and if a situation did exist where there were more medallions issued than needed, cab company owners would not be inclined to add cabs which would create a loss. 

Mary Santina, representing Retail Association of Nevada, testified in support of S.B. 100.  She explained the  Retail Association represented major retailers and small business retailers, including grocery stores, pharmacies, credit organizations, etc.  She stated a problem existed in the outlying areas off the Las Vegas Strip as cabs did not come off the Strip.  Her association believed if proper allocation of cabs existed, a higher increase of cabs would be available in local mall areas and people would be serviced.  Although she recognized cabs were "overflow" business, her retail clients felt cabs should be available to residents and clients. 

 

Chairman Spitler asked if Ms. Santina's clients would support either a  geographical or radio dispatch distribution of taxicabs.  Ms. Santina indicated her clients relied on the Taxicab Authority to assess needs of Las Vegas.  She stated if the needs were not adequately assessed,  the Taxicab Authority should handle it in regulation.  Although her organization had not conversed with the Taxicab Authority, she stated their interest in the bill pertained to the population change and growth. 

 

Bonnie James, representing Las Vegas Chamber of Commerce, testified in support of the bill.  Sharing similar concerns with testimony given by Ms. Santina, she stated many members of the chamber were retail businesses.  Answering a question from Chairman Spitler, Mrs. James stated the chamber had not discussed a specific method of allocation procedures as they felt that was up to the Taxicab Authority.  She concluded the view of the community was the need for more taxicabs as the population and tourist numbers increased and for rearrangement of taxicab allocation to the outlying district. 

 

Mr. Collins informed the committee the biggest single feedback complaint to people in the convention business was the inability to obtain a cab.  He stated the complaint far outnumbered complaints concerning room prices, loss of money gambling, restaurants, etc.

 

Chairman Spitler asked if the Las Vegas Chamber of Commerce understood by supporting the bill that cabs would not be placed geographically within Southern Nevada.  Mrs. James agreed but felt by annually evaluating, the Taxicab Authority would look at the overall picture wuth proper taxicab allocations determined.

 

Harry Vogel, Chairman, Taxicab Authority, spoke in opposition to the bill.  He stated it was his experience that the best run taxi business in the world was based in Las Vegas.  He indicated the Legislature should be proud of its contributions to the Taxicab Authority as it was a tremendously run business.  Mr. Vogel felt the allocation method ran perfectly and did not require changes.  He stated proper allocation prevented riots erupting from having too many cabs or riots from owners if there were too few cabs.    Mr. Vogel introduced Sandra Pardo, Administrator of the Taxicab Authority, and Isabelle Pfeiffer, Vice-Chairman of the Taxicab Authority.

 

Ms. Pfeiffer, Vice-Chairman, Taxicab Authority, from prepared testimony, spoke in opposition to S.B. 100 (Exhibit E). 

 

Mrs. Chowning understood Mrs. Pfeiffer's testimony to state existing allocation already served outlying areas well, but earlier testimony disputed that.  Secondly, Mrs. Chowning pointed out the law would not be "set in stone" as a possible sunset clause could be placed and a report could be made to the Legislature next session.  Mrs. Pfeiffer responded it was not practical for any legislative body to set a policy with intent to change it later if the policy did not work.  She stated the Taxicab Authority was positively certain a formula would not work for taxicab allocation that was mandated by law. 

 

Chairman Spitler pointed out the Taxicab Authority could develop different formulas by regulation. 

 

Mrs. Pardo, responding to Mrs. Chowning's question about taxicab service to areas outlying the "Strip," stated the number of medallions currently issued did not properly serve the community.  She explained allocations were issued in December of 1992.  She stated with substantial growth and projected growth, another allocation would take place at the end of the year.  Regarding the geographically restricted medallions, Mrs. Pardo explained four time, date, and geographically restricted medallions were issued to each company which kept those cabs from being in the very best areas for taxis.  These areas were downtown, the "Strip", and the airport.  Mrs. Pardo stated the restricted medallions were being studied and would be reported back to the board.  She indicated the restricted medallions improved service to outlying areas but did not answer the need.

 

Mr. Vogel reminded the committee a formula would not consider unexpected, and uncontrollable events such as war.

 

Answering a question from Mr. Collins, Mr. Vogel explained allocations sometimes happened more than once a year on a temporary 3 or 5 day basis when a large convention took place.  Mrs. Pardo interjected stating the Taxicab Authority was required to have an annual review of allocations but were not required to allocate. 

 

Reviewing the graphs which indicated an increase in other transportation markets but a flat market of taxicabs, Mr. Collins asked if the Taxicab Authority might be restricting the trade.  Mrs. Pfeiffer stated she could not answer but repeated the Taxicab Authority did not feel mandating a formula was the proper procedure for improving the taxicab authority. 

 

Mr. Vogel explained procedures of the Taxicab Authority in operating their meetings.  He indicated input was received from all businesses, drivers, cab owners, union officials, lobbyists, etc. at open meetings and everyone tried to reach agreements.  Mr. Vogel informed the committee Taxicab Authority meetings were held at a minimum of once a month. 

 

Mrs. Pardo explained all decisions of the Taxicab Authority were held at open meetings and published. 

 

Mr. Toomin asked what criteria was used to determine if additional allocations were needed.  Mrs. Pardo responded criteria for additional medallion allocation included new businesses, population growth, new property openings, competing transportation modes, airport arrival, and monthly statistics and overall health of the industry.  She did indicate the difficulty in obtaining numbers of competing forms of transportation and profit.  Mr. Toomin commented there had been an overall growth of 800 percent in rental cars which affected the taxicab industry, and the increase was not based on population at all. 

Mr. Anderson asked if the revenue per trip was a weighed-in factor for additional allocations.  Mrs. Pardo responded it was a factor.  Answering a question from Mr. Anderson, Mrs. Pardo explained in order to receive an allocation, the company needed to be a certificate holder from the Taxicab Authority.  In addition, she explained once an allocation took place, the medallion became a property right and there were no unallocated medallions.

 

Mr. Vogel explained further the process for obtaining a medallion.  Mrs. Pardo explained a need and necessity needed to be proven in Clark County before medallions could be issued.

 

Chairman Spitler requested for the committee's information, a written response from the Taxicab Authority on how the allocation process worked.  Mrs. Pardo concurred.

 

Denny Weddle, representing the Nevada Restaurants Association, indicated his support for the bill.

 

With no further business, Chairman adjourned the meeting at 3:21 p.m.

 

 

 

            RESPECTFULLY SUBMITTED:

 

 

                                   

            Carolyn J. Harry

            Committee Secretary

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Assembly Committee on Transportation

May 19, 1993

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